sebi:MO/18/MIRSD/06/04
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Certificate of registration bearing No. INB050988137 suspended for a period of three months, effective on expiry of 21 days from the date of the Order
Provisions invoked
- s. 19
- s. 12
Regulations
- Reg. 7
- Reg. 6
- Reg. 13
- Reg. 5
Parties
- M/s LRM Securities Limited
Holding
The certificate of registration bearing No. INB050988137 granted to M/s LRM Securities Limited was suspended for a period of three months, with the Order to come into effect on expiry of 21 days from June 17, 2004.
Full text
Page 2 of 11 - Contract notes did not bear pre-printed serial numbers. - Contract Notes were not issued to clients on time. - Contract Notes were issued in Form A, instead of Form B, for principal to principal transactions - Written acknowledgement was not obtained from clients for principal to principal transactions. - Contract notes did not contain the time of placement of
Page 3 of 11 advised them to show cause as to why appropriate penalty should not be levied on them for the said violations. The said broker sought time of 3 months to file a comprehensive reply. They also indicated a desire for personal hearing. 2.2 The enquiry officer, after considering the submissions made by the said broker, in the hearing granted to them on June 09, 2003, submitted her report on 25.7.2003, with the recommendation that a minor penalty of suspension of certificate of registration, for a period of 3 months, may be imposed on the said broker. 3.0 SHOW CAUSE NOTICE AND PERSONAL HEARING 3.1 A show cause notice dated August 01, 2003 was issued to the said broker, advising them to show cause as to why appropriate penalty, including
Page 4 of 11 4.0 CONSIDERATION OF ISSUES 4.1 I have considered the Inspection report, the report of the Enquiry Officer, the reply and submissions of the said broker and other material on record. My findings on the allegations made against the member-broker are as follows : 4.2.1 I note that the said broker has submitted that their contract notes did not bear pre-printed serial numbers for the financial year but that the numbers were generated on day to day basis, with the numbers starting afresh every day. Computer generated serial numbers are also acceptable, provided they run continuously from first day till the last day of the financial year. In the absence of such a system of numbering the contract notes, it would be possible for the brokers to insert back dated contract notes or to take out contract notes, for the period at the end of each day. In order to avert the possibility of such manipulations by brokers, SEBI had, vide circular dated August 05, 1996, directed all stock brokers to ensure continuous numbering of contract notes. Therefore, I find that the said broker has violated the provisions of the said circular. 4.2.2 As regards the allegation that the said broker was not issuing contract notes on time to their clients, the said broker has stated that they have issued all contract notes on time. They have further stated that the inspection kept the printers busy throughout the day and hence, they were not in a position to issue the contract notes to their client
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Source: SecMarx — sebi:MO/18/MIRSD/06/04. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.